My Voice: Tax reform for small business

Small businesses, many of which are family owned, are the lifeblood of the American economy. Accounting for more than half of the jobs and sales in the United States, protecting the well-being of small businesses is in the best interest of all Americans.

As former president of a family-owned business, I was afforded an insider’s look into the reality of managing said business within the framework of the U.S. tax code. I wish I could say domestic tax policies are designed to promote the interests of this important economic sector. Unfortunately, this is simply not the case. High overall tax rates, expensing headaches, estate taxes and capital gains taxes all serve to stymie cash flow and hinder investment and job creation.

The new administration has raised hopes in corporate America, as President Trump has talked openly about lowering corporate tax rates. Considering the U.S. lays claim to the world’s highest corporate tax rates in the world, this has been welcome news. However, despite indications the new president champions tax reform, many small business owners and family businesses wonder where they factor into the equation.

Regardless of their important contributions to the American economy, small businesses have often been overlooked in tax reform dialogues. This is likely due to the diverse nature of the sector and lack of a unified voice. Fortunately, leaders in the House of Representatives like Speaker Paul Ryan and Ways and Means Committee Chairman Kevin Brady understand the toll overzealous tax rates take on small businesses and family businesses. This is evidenced by the recent tax reform blueprint and the solid number of provisions contained within designed to protect the interests of small business owners and grow the U.S. economy.

One of the most egregious aspects of the current tax code is the estate tax. Dubbed the “death tax” by many, it forces families to buy back a portion of their own business every generation. This tax raises very little revenue each year, yet has an intensely negative effect on those it touches. The House blueprint for tax reform does away with the estate tax entirely. It also lowers capital gains taxes from 24 percent to 16.5 percent. The House proposal also allows for the immediate expensing of capital investments and lowering the tax rate for pass-through businesses.

I am a supporter of the House blueprint because it protects small family business. As major drivers of the economy, it makes sense to include these companies in tax reform efforts. When small businesses retain more of their profits, they have the freedom to invest and create jobs. This ultimately leads to local, state and national economic stability.

With family businesses and statewide economic growth on the line, I hope South Dakotans can count on Sens. John Thune and Mike Rounds and Rep. Kristi Noem to champion the House blueprint for tax reform.

MY VOICE

Dirk Lohry is president of Blue Eyes, LLC, in McCook Lake. While still in high school, he began working for his family-owned and operated fertilizer company, which his father, L.W. Lohry, began in 1953. After graduating college, he worked on a joint venture with his father’s company to design and build an ammonia plant in Lake Charles, La., where he was exposed to managing a large project in a new labor environment. During a labor dispute the plant was attacked by a union mob that killed two people, injured several others and damaged the plant. The incident resulted in a right to work law in Louisiana. After completing a masters degree in chemical engineering at Iowa State University, Lohry returned to work in the family business in Sioux City, where he was instrumental in developing new products and processes that are the basis for the company’s success today. His grandfather, A.W. Lohry started Kay Dee Feed Company in the stockyards of Sioux City, Iowa, in 1928. My Voice columns should be 500 to 700 words. Submissions should include a portrait-type photograph of the author. Authors also should include their full name, age, occupation and relevant organizational memberships.

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